MS 202 GenerosityClass 2

David Thoroughman

David is the President and CEO of MortarStone, a privately-owned Christian data analysis company headquartered in Reno, Nevada, with employees in Chicago, Seattle, and Pittsburgh. MortarStone provides both standard and customized data analysis for the church, both nationally and internationally. The company works with over 600 churches, two million plus donors and is tracking giving to Kingdom causes in excess of $4 billion. David and his leadership team work with some of the largest and fastest growing churches in America. His passion is to help church leadership have objective insights in order to be more efficient with the resources that have been entrusted to them.

Class 2—Key Performance Metrics

It is imperative to understand the foundation of why data is important and what metrics church leaders should utilize. This class will examine the church giving metrics in the internal effectiveness of period over period growth and external benchmarks of peer churches grouped by annual budget. The result is a comprehensive analysis that is used to identify ministry strengths and areas that can be improved.

KPMs – What do you measure and why?

Common metrics most churches measure Weekend Attendance Giving [weekly, Monthly, Yearly] Giving per Capita Baptisms Small Groups and Small Group Attendance

Common KPMs

Communicated to the body in a celebratory fashion

They are the “report card” for the ministry

NOTE… KPMs that are ‘corporate or

macro’ should be developed at an individual or micro level to guide leadership

• Giving:

• Weekly

• Monthly

• Yearly

• Giving / Capita

KPMs help answer the question….How did we get here?

The church will focus [and celebrate] the corporate [macro] goal

Leadership should develop individual [micro] metrics to accompany the corporate [macro] metrics to ensure the goal is achieved

Moving Vision to Reality

Generosity Metrics Don’t fall into a false sense of success when measuring annual giving

and giving per capita - both are up, great, but lets dig deeper!

Establish additional metrics that are more actionable

Foundational Concepts

1. Segment donors into Giving Units

2. Segment Giving Units into Gift bands

3. Measure giving +/-across segments and various reports

Giving Units vs. Donor Units Giving Unit KPMs A Giving Unit is a donor that meets a minimum

giving threshold [e.g. $200.00 GF giving / year] 97-99% of total giving on average comes from

Giving Units The average church 50-75% of donors are Giving

units. By the numbers…..

AWA = 100 [50 are donors, 25-30 are GU] Simply put – 25-30 people out of 100 keep the lights

on!

Giving Units vs. Donor Units

GU = $200

GU Giving = 99% of total Giving

GU total = 626 of 1165 [54% of tot.]

GU = $3,900 in annual giving

Going Wide-DU vs. Deep-GU

By default, church measures success by going ‘wide’ by measuring weekend attendance and annual giving.

If growing generous disciples is a goal, then should we consider a ‘deep’ strategy as well? And if so, what external behavior [KPMs] should be present as someone grows in their faith? Example… Giving increasing Volunteering increasing

e.g. 1% inc. = ‘x’ fin. gain

Gift Bands Gift Banding is the segmenting of Giving Units in order

to study giving trends across various giver segments Gift Band 1 [$1-$200] Gift Band 2 [$200-$1,000] Gift Band 3 [$1001 - $5,000] Gift Band 4 [$5,001 - $10,000] Gift Band 5 [$10,000+]

Note: Gift Band 1 only measured for first time givers

Gift Bands Gift bands are a

feeder system limited by donor capacity

A divergent pattern represents a ‘hole’ in your stewardship strategy

Ministry Funding How dependent is the ministry on your financial leaders

and what does that suggest? Strategy –

Examine your funding dependency [top 1%, 10%, etc..] How does your growth look YoY internally? How do you compare to your peers externally?

Ministry Funding Review and

benchmark: 1% [8%-14%] 20% [57%-63%] 50% [87%-93%]

Is giving growth broad based or dependent on top 1%?

KPMs for New Givers What is your New Giver strategy?

Giving Base

New Givers

Lapsed Givers

Moving visitors to givers

First time visitor and donor strategy

Visitors First time giver Regular giver

• What is your documented strategy?

• Who is responsible for implementing it?

• How do you define success?

Creating the foundation…

Some things to consider…

• Educate what it means to be a steward

• Cast vision of where the church is headed

• Create trust through transparency

Visitor Giver Progression

Visitor

New Donor KPMs How many new givers are you attracting?

Segment into gift bands Know you retention rate [78-80%] Know your giving growth rate [150%+]

Next Steps… Benchmark Goal set Monitor progress

New Donor KPMs Gift Band 1

[$1-$200] Are you

increasing or decreasing YoY

Retention Rate 31%

Giving Growth 87% of prior yr.

Closing the Back Door Understanding the ‘At Risk’ component of the church

Giving Base

New Givers

Lapsed Givers

Back Door Every church has one, so who is on it? Exit interviews ARE worth the time! Back door stat’s by giving band

What category are you losing? Band 1 or Band 5 What does it mean?

Back Door Steady decline in ‘not

losing donors giving between $5,000 and $10,000 annually

Back Door Steady to slight

increase of losing ‘lower’ capacity donors [$200-$1,000]

Attrition is normal in a growing church.

Know your % change across all gift bands

Donor Churn Donor Churn is your

efficiency ratio Spending resources on

attracting new donors is great, but if you are not assimilating them than its like throwing mud against the wall

Donor / Volunteer fatigue is real!!!

Donor Churn Donor churn is the

analysis of knowing the ratio of who you bring in as a giving unit and who stops or goes out the back door as a giving unit.

A healthy ratio is 1.5 – 2 new donors to 1 out the back [2:1]

Giving Unit Analysis

Benchmarks for Giving Units GU unit retention – 80%-82% GU giving growth – 120%

50% - Increasing from YoY 25% - Stable [decreased giving no more than 20% of prior

year] 15% - Struggling [decreased giving by upto 50%] 10% - Short [decreased giving by 50%+]

Giving Unit Giving Retention Benchmarks for Giving Units

GU - unit retention – 80%-82%GU - giving growth – 120%

Giving Unit Giving Inc/DecGU giving growth – 120%

• 50% - Increasing from YoY• 25% - Stable [decreased giving

no more than 20% of prior year]

GU giving growth – 120%• 15% - Struggling [decreased

giving by up to 50%]• 10% - Short [decreased giving by

50%+]

Quick recap… Back Door – who was giving that stopped?

1. They moved away

2. Financial / family hardship

3. Vision issue Analyze who is on the back door [avoid false positives] Know the back story

Quick recap… Giving Unit – YoY analysis

Giving Unit Retention – 80%-82% Giving Unit Growth – 120%+ Giving Band analysis within segments

What does it? What do we do?

Closing Comments and Questions

This is part of the foundation of KPMs to start thinking about – LOTS MORE TO COME!!!

The free offer for a data review for those that have F1, CCB or The City – we need you data connection by next week. It takes 5 minutes!

We will make every effort to coordinate a free review with a consultant within the next 2-3 weeks

Those that are not API compliant – email me for other options